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National Wage and Equal Pay Cases 1972

Summary

In this decision the Commonwealth Conciliation and Arbitration Commission decided that all award rates, other than the minimum wage, would be set without regard to the sex of the employee. They would be set on ‘work value’ grounds, that is, on the basis of the value of the work. This led to the end of the system of unequal award rates that had operated since 1912.

This was the second of two Equal Pay Cases.

It introduced the concept of 'equal pay for work of equal value'. The case required analysis of the family component incorporated into male wages which had historically resulted in different wage rates for male and female workers.

The Commission said it had to address four broad issues:

whether there should now be a general increase in wages;

whether there should be an increase in the male minimum wage;

whether the male minimum wage should be applied to females;

whether any new principles should be formulated about equal pay for females. [p.175]

As to the first two issues:

The Commission has since 1967 assumed that there would be a national wage case decision each year and if we were to accede to the unions' present request there would be two this year ... Some exceptional or unexpected circumstance would be required to warrant alteration of the 1972 national wage decision during the period of its operation. No such exceptional or unexpected circumstance has been shown. [p.175]

On the third matter the Court noted that the minimum wage has always included a family component but:

the unions now argue as a simple matter of equity that females should receive the same minimum wage as males. We reject that argument because the male minimum wage in our awards takes account of the family considerations we have mentioned. Because of the essential characteristic of the male minimum wage we decline to apply it to females ... [p.176]

Coming to the last issue, the Court agreed that there was ‘still a relic of the concept of the family wage’, but that it was no real bar to a consideration of equal pay for equal work. [p.176]

After assessing the developments in the area of equal pay the Court propounded a new principle:

In our view the concept of ‘equal pay for equal work’ is too narrow in today’s world and we think the time has come to enlarge the concept to ‘equal pay for work of equal value’. This means that award rates for all work should be considered without regard to the sex of the employee. [p.178]

The Court provided guidance as to how this principle would apply:

The principle of ‘equal pay for work of equal value’ will be applied to all awards of the Commission. By ‘equal pay for work of equal value’ we mean the fixation of award wage rates by a consideration of the work performed irrespective of the sex of the worker. The principle will apply to both adults and juniors ...

The eventual outcome should be a single rate for an occupational group or classification which rate is payable to the employee performing the work whether the employee be male or female. [p.179]

As to the costs associated with the changes:

The employers estimated that the cost of granting the claims would amount to some $645m per annum ... We recognise, however, that the increase in the total wages bill as a result of our decision will be substantial ... In our view the community is prepared to accept the concept of equal pay for females and should therefore be prepared to accept the economic consequences of this decision. [p.178]

The Court acknowledged that implementation would take some time, setting a timeline via which the principle would be implemented in three equal instalments by 30 June 1975.